RM4 billion savings from diesel subsidy cuts not going to fund ministerial allowances: Malaysia PM Anwar

RM4 billion savings from diesel subsidy cuts not going to fund ministerial allowances: Malaysia PM Anwar

SINGAPORE: Savings of RM4 billion ( US$ 847.8 million ) from Malaysia’s diesel reforms will be used to fund public transport and cash aid, said Prime Minister Anwar Ibrahim, as the country puts a brake on subsidies of the fuel. &nbsp,

Mr. Anwar, who is also finance minister, made the remarks at the finance ministry’s monthly assembly in Putrajaya on Tuesday ( Jun 11 ), stating that the money raised from his recently announced plans to reduce fuel subsidies would not go toward increasing the salaries of “ministers or other ministries,” and that it would instead be “redirected back to the people.”

We must not be granting incentives to the ultra-rich, large industries, and foreigners.” We are no discriminating against foreigners, but they do not pay taxes, and their tax tax is little,” they said. Therefore, our responsibility is firstly to our people”, said Mr Anwar, according to local media, adding that the savings would be directed towards initiatives such as Sumbangan Tunai Rahmah (STR ).

The STR money contribution provides monetary help to Malaysia’s small and middle- income households. Mr. Anwar noted in his statement that nine million people had been receiving the STR, which has increased the cost of the program by almost RM10 billion.

Following finance minister Amir Hamzah Azizan, who was also present, had announced on Sunday that fuel subsidies for some groups in Peninsular Malaysia would be ended starting at midnight on June 10. &nbsp,

This, he said, had set the price of gasoline at RM3.35 per gallon according to the automated sales process, away from the current value of about RM2.15 per litre.

The Finance Ministry added that it will start setting fuel energy prices to match market rates in a statement released on Sunday.

The prime minister made the most recent announcements about three weeks after his exclusive May 22 address, which outlined the rationalization of diesel subsidies for residents of Peninsular Malaysia. Up then, he did not reveal when the rationalisation may be implemented. &nbsp,

Those in the Malay states of Sabah and Sarawak, where the use of fuel cars is popular, would be free from the reforms, he said. &nbsp,

Mr. Anwar reaffirmed in his televised special address that “any targeted subsidy should not burden the majority of the people.”

He added that the government would grant cash subsidies to businesses that use a select number of commercial diesel vehicles, including buses and taxis, and that some eligible individual diesel vehicle owners would receive support from the government. &nbsp,

To ease the impact of the reforms, the government also introduced the Budi Madani cash aid programmes, where around 30, 000 eligible recipients would receive RM200 in their respective accounts, according to the New Straits Times. &nbsp,

Petrol and diesel are among the lowest prices in the world. The rationalization of fuel subsidies has been a topic of conversation for almost 20 years, but no government has had the political will to carry out the plan. &nbsp,

Following the rationalization of subsidies for chicken sales and electricity tariffs announced last year, Mr. Anwar has also stated that the reforms to diesel subsidies were the third government initiative to restructure the country’s subsidy distribution system. These are estimated to save RM4.5 billion and RM1.2 billion a year, respectively.

The actions are a part of a wider trend to stop paying for unnecessary blanket subsidies. &nbsp,

At his special address last month, Mr. Anwar stated that” the ultra-rich are more benefitted by Bangkok subsidies because their consumption or spending on goods and services is greater.” ” 3.5 million foreigners also benefit from ( them )”.